President Obama has announced that now is the time for the U.S. and Europe to lead the world, in a speech at the British Parliament during the second day of his UK state visit.

He told that despite the rise of new global powers, the global influence of the U.S., the U.K. and its allies remained indispensible. However, he also warned that the leadership of nations across the West must “change with the times” to remain relevant to economic and security issues.

The president’s 35-minute speech was attended by MPs and peers, as well as former British prime ministers Gordon Brown, Tony Blair and Sir John Major. He told them: “There are few nations that stand firmer, speak louder and fight harder to defend democratic values around the world than the United States and the United Kingdom.”

He rejected arguments that the rise of global superpowers such as China and India meant the end for American and European influence in the world: “Perhaps, the argument goes, these nations represent the future, and the time for our leadership has passed. That argument is wrong. The time for our leadership is now.

"It was the United States, the United Kingdom, and our democratic allies that shaped a world in which new nations could emerge and individuals could thrive. And even as more nations take on the responsibilities of global leadership, our alliance will remain indispensable to the goal of a century that is more peaceful, more prosperous and more just.”

Addressing Middle-East issues Obama said that the West must look more towards nations such as Tunisia and Egypt and support their transitions into democracies through commerce and trade. He said, “We do this knowing that the West must overcome suspicion and mistrust among many in the Middle East and North Africa - a mistrust that is rooted in a difficult past.”

He also insisted that the allies had “turned a corner” in Afghanistan, allowing the country itself to take the lead in fighting the Taliban.

President Obama’s speech did not only focus on the serious issues however, he received a hearty round-of-applause when he joked that the U.S. and U.K. had shown to the world that it’s “possible for the sons and daughters of former colonies to sit here as members of this great Parliament, and for the grandson of a Kenyan who served as a cook in the British Army to stand before you as president of the United States.”

At an earlier press conference, the issue of Libya was a central focus for debate. British Prime Minister David Cameron said there was no future for Libya with Col Gaddafi in power, and told that he and President Obama "agree we should be turning up the heat in Libya.”

Obama agreed that there would be “no let-up in the pressure” on Col Gaddafi, however he also said: “Ultimately this is going to be a slow, steady process in which we are able to wear down the regime forces.”

Wednesday evening the President and First Lady, Michelle Obama will host a banquet for the Queen, the Duke of Edinburgh among others at the U.S. ambassador’s residence.